Corn
Corn is trading 20 to 27 cents higher this morning after another mostly dry weekend. It is just another weather market Monday. Temperatures have moderated, and we would likely be lower if there was moisture to tap into. Moisture forecasts call for heavy rains across the South and the southern edge of the Corn Belt this week, but not the primary acreage states. Corn was up 71 cents per bushel last week despite the Friday correction. The monthly USDA crop report on Wednesday morning is expected to show a drop in projected corn yields, but the trade is uncertain how far the WASDE analysts will be willing to go without field data (first collected in August). A Memphis based service is projecting a 13.641 billion bushel corn crop with yields estimated at 153.5 and acreage at 96.759. A Reuters survey puts estimated ending stock at 1.279 billion bushels. Chinese futures were up 6 cents per bushel overnight.
Soybeans
Soybeans are currently 33 to 37 cents higher, more than offsetting Friday losses. They were up $1.07 last week. A Memphis based analytical firm is projecting soybean acres at 75.959 million, yield at 42 BPA and crop size at 3.161 billion bushels going into the monthly USDA crop report to be released on July 11th. USDA is likely to use the higher acreage shown on June 29, however. Weekly export sales were impressive for 2012/13 marketing year. USDA reported net sales of 1,464,700 MT for 2012/13 delivery. The primary sale for 2012/13 was to an unknown in the amount of 1,300,000 MT. The large soy oil purchase by China announced under the daily reporting system will be in this week's report, as will the 120,000 MT soybean sale reported under the daily system. Chinese futures jumped 78 cents per bushel on Monday, and soy oil rose sharply. Rain expected this week will tremendously benefit double crop soybeans, along with full season beans in the southern end of the Corn Belt.
Wheat
Wheat futures are trading 16 to 20 cents higher in Chicago this morning. USDA reported weekly wheat export sales through June 28 totaled 418,900 MT. Trade estimates ahead of the report had been 300 to 450 thousand MT. As of June 7th Canadian Prairie farmers had planted or intended to plant larger wheat acres than last year. As of that date Canadian farmers had seeded 23.8 million acres, up by 10.9% from 2011. A Reuters analyst poll puts likely US all wheat production in the Wednesday USDA report at 2.247 billion bushels, with winter wheat at 1.672 billion.
Cattle
Cattle futures are called 10 to 25 cents lower this morning. Nearby August was down $1.25 for the week. Negotiated cash cattle trade was modest on Friday, with NE around 15,000 head selling for $186 to $189 in the dressed. KS sales were mostly $117 in the live and $185 in the dressed on about 10,000 head. Wholesale beef prices were lower on Friday. Choice was down $0.92 and Select was down $1.13 putting the spread at $17.94. Estimated slaughter for the week was 571,000 head compared to 585,000 a year ago. USDA reported weekly beef export sales were 19,900 MT up 18% of the four week average. That didn’t support wholesale prices because of a sliding stock market amid fresh worries regarding Chinese and European economic growth.
Hogs
Lean Hog futures are expected to start the day steady to 20 cents higher. Futures still remain at a discount to the CME Lean Hog Index with which they need to converge on July 16th. The Index was down $0.47 at 100.90 as of July 3rd and is estimated at $100.66 this morning. Cash hogs were 3 cents lower in IA/MN, 43 cents lower in the WCB and $3.06 lower in the ECB on Friday. The estimated slaughter for last week was 1.678 million head, within 1000 of the actual figure for that week in 2011. Pork trading was at lower money on Friday. Pork loins were down another 78 cents and have been the weakest component.
Cotton
Cotton futures are trading 40 to 60 points higher this morning. December futures lost 71 points last week. July futures are not a reliable benchmark, expiring today. The US dollar was up sharply on Friday and up 1.687 for the week. It is weaker vs. the euro this morning. India is expected to export a record 13.5 million Indian bales of cotton with the bumper harvest of 2011/12. China is the main buyer of Indian cotton. Certificated stocks were at 129,522 with 982 new certs and 3,825 awaiting review. The Cotlook A index was at 83.25, down 1.30 cents/pound from the previous day. There were 120 delivery notices vs. July futures, again with 100% of them stopped by Dreyfus.
There is substantial risk of loss to futures and options trading. Past performance is not indicative of future results.
By Donna Hughes
Lone Star Portfolio Advisors, Inc. was founded by Donna Hughes. Donna began her career in the industry in 1978 after graduating High School as a member of the Chicago Mercantile Exchange’s Inspection and Delivery Department where she was responsible for scheduling and facilitating the USDA grading and delivery for various Exchange Commodities. After 1 ½ years, she was offered a position working with George Segal, a prominent hedger in the Pork Belly market. It was through this relationship that she was mentored and taught the hedging process by working with Mr. Segal as well as other leaders of the Pork Industry. In 2004, Donna moved to Texas where her skills in the industry were utilized to help individual and corporate producers with their Risk Management Goals. Her Daily Market Commentaries are heard on the AllAgNews.com Radio Network broadcasting throughout Texas. She also contributes to magazines and periodicals including PetroEvents and Ag Monthly.
Donna created Lone Star and implemented strategic relationships with Daniels Trading and R.J. O’Brien leveraging their services to enable Lone Star to Build Lasting Relationships Thru Information, Execution and Research.
